I’m concerned that New Year’s Eve parties will damage my investment property – what can I do to help minimise the risk?
By Carolyn Parrella, Executive Manager, Terri Scheer Insurance
New Year’s Eve rental property parties can leave an expensive financial hangover and be a source of stress for unsuspecting landlords.
While tenants should be responsible for the rental property, invited party guests, who often have no attachment to the property, may not treat it with the same respect as they would their own home.
New Year’s Eve parties that get out of hand can leave landlords susceptible to costly damage and clean up bills, but it doesn’t have to be that way.
There are a number of steps for landlords to “New Year’s Eve proof” their properties.
• Screen tenants
Prevention is often better than the cure. Tenants are entitled to enjoy their time at the property however it must be done with respect and consideration for the landlord.
Including lifestyle questions on the lease application can help to identify and minimise future issues. Does the applicant have regular visitors or guests? What type of activities will be undertaken at the rental property? Landlords can use such questions to help filter potentially troublesome tenants.
Renter history checks can also identify any past issues of accidental damage that may be attributed to out-of-control partying.
• Enforce lease agreement
Setting the ground rules upfront and in writing can help avoid future headaches. A rental agreement may allow landlords to enforce noise restrictions, such as no loud music after 10pm, and a maximum number of guests at the property at any one time.
It’s a common oversight by landlords not to use the formal rental contract as a way to outline a tenant’s responsibilities. This can help prevent the likelihood of parties and trouble arising on New Year’s Eve. As the holiday season approaches, it’s also an opportunity to remind tenants of their obligation set out in the rental agreement.
• Maintain relationships and communication
Maintaining a positive, open and transparent relationship with tenants will help put landlords in good stead ahead of New Year’s Eve festivities.
Responding quickly to queries and concerns can help build a good rapport with tenants, making them more inclined to treat the property as though it were their own.
• Conduct property inspections
Property inspections should be non-negotiable and should be scheduled both before and after the holiday season.
Regular inspections can provide early indications of a tenant that may fail to fulfil their rental agreement obligations if accidental or malicious damage is identified. Likewise, post-New Year’s Eve inspections can help identify any accidental damage incurred during the holiday season.
This also shows the tenant that the landlord has an active interest in the care taken with their property and helps reinforce the conditions under which the tenant has leased the property.
• Review insurance coverage
The holiday season is a time that can carry a heightened risk of accidental damage to investment properties, making a specialised landlord insurance policy all the more important.
Too often property investors overlook risk management until after a tenant has moved in or when something has gone wrong.
Maintaining a specialised landlord insurance policy can protect investors from the many risks associated with owning a rental property and provide peace of mind if the unforeseen should occur, such as malicious and accidental damage, loss of rental income and potential legal liability if someone is injured at the property.
Whether you are looking to buy your first home, move home, refinance, or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork – plus there is no charge for this service. Get help from a local mortgage broker
Carolyn Parrella joined Australia's leading landlord insurance specialists, Terri Scheer Insurance, in 2004 and was appointed Executive Manager in 2009.
Carolyn oversees all operations within business, which aims to protect landlords against the risks associated with owning a rental property. These include malicious damage by tenants, accidental damage, legal liability for occurrences on the property that cause death or bodily injury, and loss of rental income as a result of damage to a property or a tenant absconding.
As a South-Australian based national insurance firm, Terri Scheer Insurance is the only company in Australia to specialise solely in landlord insurance.
Carolyn also owns two investment properties.
For further information, visit www.terrischeer.com.au or call 1800 804 016.